Private equity stocks down 30-40% in three months, bigger worry than geopolitical risk

"I think the bigger concern I have is more about what's going on in the private equity and private credit space where, you know, if you look at like, you know, Blackstone, KKR, Blue Owl, you know, some of these stocks are down, you know, 30, 40% in the last three months."

"Blackstone posted full-year 2025 revenue of $14.45 billion, up 27% year over year, with total AUM hitting $1.27 trillion. KKR raised a record $129 billion in capital during 2025 and is sitting on record dry powder of $126 billion. These are not struggling businesses. The selloff is a sentiment and macro story, not an earnings story."

"Davies is focused on credit spreads as his signal. Specifically, the spread between double-B and triple-C rated debt, currently around 750 basis points. Over the past two years, that range has run from roughly 550 to 900 basis points. At 750, you're elevated but not at the panic zone. It's a yellow light, not a red one."

Private equity and private credit firms including Blackstone, KKR, and Blue Owl have experienced significant stock declines of 27-40% over three months, yet their underlying businesses remain strong. Blackstone reported 2025 revenue of $14.45 billion, up 27% year-over-year with $1.27 trillion in AUM. KKR raised record capital of $129 billion in 2025 with $126 billion in dry powder. The selloff reflects sentiment and macroeconomic concerns rather than fundamental deterioration. Credit spreads between double-B and triple-C rated debt at 750 basis points signal elevated but not critical conditions. Blue Owl faces company-specific challenges including halted redemptions at a retail private credit fund and securities litigation, compounding broader market pressures.

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